http://www.businessweek.com/news/2013-07-04/blackberry-faces-sanctions-in-indonesia-after-service-outage

Bloomberg News

BlackBerry Faces Sanctions in Indonesia After Service Outage

July 04, 2013

The Indonesian government is preparing sanctions against BlackBerry (BBRY:US) after an outage yesterday left Indonesians without access to some messaging services from the Canadian smartphone maker.

The sanctions are pending BlackBerry’s report into the disruption and the government will also consult the nation’s telecommunication regulatory board to see whether the incident violated local rules, said Gatot Dewa Broto, a spokesman for the Communication and Information Technology Ministry. It’s the fourth outage for BlackBerry since April 2012, he said.

“We don’t want to be seen as allowing this to keep happening again,” Broto said by telephone today. “We are preparing sanctions,” he said, declining to elaborate what these may be.

Yesterday’s outage, which affected the popular instant-messaging application BlackBerry Messenger, may hinder the company’s efforts to sustain its market share in the world’s fourth-most populous nation. BlackBerry has about 6.3 million subscribers in Indonesia, up from 6 million in 2012 and 5 million in 2011, Broto said.

Still, BlackBerry probably won’t reach the ministry’s forecast of 7 million subscribers this year amid tighter competition from Google Inc.’s Android-powered smartphones, he said.

The service interruption primarily affected Web browsing, social networking and BlackBerry Messenger, Matt Stewart, a spokesman for the Waterloo, Ontario-based company, said today. He declined to confirm the ministry’s figures for Indonesian subscribers.

Subscribers Decline

BlackBerry’s worldwide subscriber base slipped to 72 million last quarter, from 76 million and 79 million in the preceding quarters, and the company will no longer disclose a user tally. BlackBerry last week disclosed weaker-than-expected sales of its flagship Z10 handset, a new phone the company was counting on to win back market share lost to Apple Inc. (APPL:US)’s iPhone 5 and Samsung Electronics (005930) Co.’s Galaxy S4.

Indonesia has imposed sanctions on BlackBerry before. In September 2009 the government ended a two-month freeze on issuing licenses for new BlackBerry models after it opened a service center in Jakarta. The communications ministry in June 2009 halted licenses for sales of new BlackBerry models pending the opening of a local branch office with after-sales service.

BlackBerry rose 0.4 percent to C$10.21 at 10:53 a.m. in Toronto. The stock has dropped 13 percent this year.

To contact the reporters on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net


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